Iran has been hit by a massive wave of redundancies, both directly and indirectly as a result of the conflict with the US and Israel. Its Deputy Work and Social Security Minister, Gholamhossein Mohammadi, said two days ago that two million people had lost their jobs because of the war. The widespread lay-offs are one of the biggest topics of conversation among ordinary Iranians on social media. Employers and government officials euphemistically refer to it as balancing the workforce. The impact goes far beyond factories closed down after being hit by air strikes. It also includes other manufacturers, retailers, import and export business, and the digital sector.
You can see it from the emptiness of the metro, posted one user on X. You can see it from the abundance of parking spaces near the office, said another. You can get it from the emptiness of the Hemmat [highway in Tehran]. My one-and-a-half hour journey took only half an hour, came another comment.
The war has also had a negative impact on consumer spending, with many people cutting back to essentials, which has reduced demand in sectors such as tourism, restaurants, and retailers other than groceries. The Iranian authorities' decision to impose an internet blackout since the war broke out has also hit Iran's relatively thriving tech and digital sectors. Officials say the decision to shut down the internet was taken for security reasons, suggesting that it is to prevent surveillance, espionage and cyber-attacks. It took the same step during the brutal clampdown of protests earlier this year, which was mainly aimed at restricting protesters' ability to organise and access information.
Back in January, Iran's Information and Communication Technology Minister, Sattar Hashemi, said that every day of internet blackout cost the economy at least 50 trillion rials ($35m; £28m; €32m). By that count, the 52 days of internet shutdown since the start of the war have cost the Iranian economy more than $1.8bn. The blackout has particularly hit female earners. Only one in nine working-age women in Iran were in work before the war, official data shows, and hundreds of thousands of women relied on platforms such as Instagram to connect with their customers to sell products.
And even at a time when there is increased demand for news as a result of the conflict, many media outlets have also shed their workers. This includes the Iran Labour News Agency (Ilna) that made all its journalists redundant last week and asked them to work as freelancers.
In late March and early April, the US and Israel hit two of Iran's largest petrochemical plants, in Asaluyeh and Mahshahr, as well as two of the largest steel manufacturers, Mobarakeh Steel and Khuzestan Steel. While tens of thousands of people lost their jobs directly, hundreds of thousands more work in firms that either supply these key industries or those that rely on them for raw materials.
One example is Iran's huge car manufacturing sector, which is estimated to directly or indirectly employ one million people, with multiple reports of layoffs across its supply chain. On top of losing domestic supplies, the disruption in the Strait of Hormuz has also forced some factories to shut and dismiss their workers.
An executive in a manufacturing firm in the central province of Qom told the BBC that they had to stop production due to lack of materials: We were hoping that when the war stopped, things would go back to normal. But we cannot even get the material loaded on the ship, as our foreign suppliers are worried that the ship won't be permitted to enter the Iranian waters. Another social media user has reported that the textile company where their sister-in-law worked has fired 600 out of their 650 personnel, as they cannot import raw material from Australia anymore. There are reports that some companies are making redundancies with the promise of rehiring people as soon as conditions improve, while others are forcing their employees into taking unpaid leave.
The government has announced a loan scheme for small businesses of 440m rials (less than $300) per worker, which has to be paid back in six months with an interest rate of 18% to 35%, based on how many redundancies they make. This wave of unemployment across different sectors comes at a time when the official inflation rate passed 50% in March 2026, and many experts believe that it is likely to increase in the coming months.
If the war resumes or Iran remains under strict international sanctions, life could get much harder still for tens of millions of Iranians. Air strikes alone will have devastating consequences, but economic downturn, heightened unemployment and runaway prices could deepen the crisis considerably.
You can see it from the emptiness of the metro, posted one user on X. You can see it from the abundance of parking spaces near the office, said another. You can get it from the emptiness of the Hemmat [highway in Tehran]. My one-and-a-half hour journey took only half an hour, came another comment.
The war has also had a negative impact on consumer spending, with many people cutting back to essentials, which has reduced demand in sectors such as tourism, restaurants, and retailers other than groceries. The Iranian authorities' decision to impose an internet blackout since the war broke out has also hit Iran's relatively thriving tech and digital sectors. Officials say the decision to shut down the internet was taken for security reasons, suggesting that it is to prevent surveillance, espionage and cyber-attacks. It took the same step during the brutal clampdown of protests earlier this year, which was mainly aimed at restricting protesters' ability to organise and access information.
Back in January, Iran's Information and Communication Technology Minister, Sattar Hashemi, said that every day of internet blackout cost the economy at least 50 trillion rials ($35m; £28m; €32m). By that count, the 52 days of internet shutdown since the start of the war have cost the Iranian economy more than $1.8bn. The blackout has particularly hit female earners. Only one in nine working-age women in Iran were in work before the war, official data shows, and hundreds of thousands of women relied on platforms such as Instagram to connect with their customers to sell products.
And even at a time when there is increased demand for news as a result of the conflict, many media outlets have also shed their workers. This includes the Iran Labour News Agency (Ilna) that made all its journalists redundant last week and asked them to work as freelancers.
In late March and early April, the US and Israel hit two of Iran's largest petrochemical plants, in Asaluyeh and Mahshahr, as well as two of the largest steel manufacturers, Mobarakeh Steel and Khuzestan Steel. While tens of thousands of people lost their jobs directly, hundreds of thousands more work in firms that either supply these key industries or those that rely on them for raw materials.
One example is Iran's huge car manufacturing sector, which is estimated to directly or indirectly employ one million people, with multiple reports of layoffs across its supply chain. On top of losing domestic supplies, the disruption in the Strait of Hormuz has also forced some factories to shut and dismiss their workers.
An executive in a manufacturing firm in the central province of Qom told the BBC that they had to stop production due to lack of materials: We were hoping that when the war stopped, things would go back to normal. But we cannot even get the material loaded on the ship, as our foreign suppliers are worried that the ship won't be permitted to enter the Iranian waters. Another social media user has reported that the textile company where their sister-in-law worked has fired 600 out of their 650 personnel, as they cannot import raw material from Australia anymore. There are reports that some companies are making redundancies with the promise of rehiring people as soon as conditions improve, while others are forcing their employees into taking unpaid leave.
The government has announced a loan scheme for small businesses of 440m rials (less than $300) per worker, which has to be paid back in six months with an interest rate of 18% to 35%, based on how many redundancies they make. This wave of unemployment across different sectors comes at a time when the official inflation rate passed 50% in March 2026, and many experts believe that it is likely to increase in the coming months.
If the war resumes or Iran remains under strict international sanctions, life could get much harder still for tens of millions of Iranians. Air strikes alone will have devastating consequences, but economic downturn, heightened unemployment and runaway prices could deepen the crisis considerably.
